how is this correct ? I dont have the access to Bloomberg and I asked one of my friends to send me the screenshoot. Please have a look at the CRP of Germany.

Question

how is this correct ?  I dont have the access to Bloomberg and I asked one of my friends to send me the screenshoot. Please have a look at the CRP of Germany.

owlfred · Answer

Hoot! You just asked your first question! Hang tight while I find people to answer it for you. You can thank people who give you good answers by clicking the 'Good Answer' button on the right!

anonymous · Answer

attachment

anonymous · Answer

I didn’t look the Bloomberg screen, but what I can tell you is: as Germany is a triple A rated country, the country risk premium should be 0.0%, you can work just with the market premium to compute the CAPM if it is what you are doing.
Hope this helps…

anonymous · Answer

btw, have u checked out the formula on CRP? it wouldn't just depend on the spread between the US Treasury and the corresponding country's Govies with a similar tenor and denomination (USD), but also the volatility of its stock index to the volatility on the Govies' yield, based on what i've studied before.

checking on the Bloomberg, the formula being used is CRP=Expected Market Return - Risk Free Rate (uses 10 year Treasury securities). it seems to me that the Expected Market Return uses the Euro Stoxx (regional), guess that's why it is so high.

anonymous · Answer

I like Bloomberg terminals but they are data providers, not deep thinkers. So, don't trust the analytics from Bloomberg further than you can throw them.